Social Security Secretary, Alistair Campbell"The Tories are promising cuts they do not have the money to pay for" real 28kShadow Chancellor, Michael Portillo"I think that people have been terribly over-taxed by this government" real 56k

Thursday, 10 May, 2001, 09:23 GMT

Portillo calls for tax cuts

Tax cuts are at the centre of the Conservative agenda

The Shadow Chancellor, Michael Portillo, has pledged that the Conservatives will cut taxes for every motorist by £100 a year if elected.

Pensioners, families, and everyone who saves or drives would be better off under Tory plans which will be unveiled in their manifesto on Thursday, he said.

Mr Portillo made a cut of 6p per litre in the price of petrol the centrepiece of his £8bn plan to lower taxes.

He defended his own plans for savings in departmental budgets in trade and industry and transport and the environment, and changing the way universities were funded.

But Labour said the Conservatives would have to make cuts in basic services like health and education to fund their tax cuts.

Pension controversy

The Labour Party has attacked Conservative plans to allow young people to opt out of the National Insurance system.

Alaistair Darling said that this left a £6bn black hole in the National Insurance Fund which would have to be met by higher borrowing.

But Mr Portillo said it was wholly responsible to see whether young people could fund some of their own pensions

In the long run, that would ensure that people got a higher return on their investments, and their higher pensions would lead to higher tax returns by the government.

Mr Portillo said that "this government is so blinkered" that it cannot see the long-term problem.

Labour has published tape recordings of private meetings where Mr Portillo said that under his plan "there is going to be a hole in the National Insurance Fund" and that it could be overcome "for a start, by selling gilts."

But Mr Portillo said that it was right to discuss the costs of transition to a new system, using all the resources of the financial community.